OK, so US lawmakers have slipped in some “buy American” provisions into the stimulus bill that President Obama is trying to get passed into law. I expect that the people who had those provisions put into the package had the best of intentions towards the thousands (millions?) of Americans currently seeking work or on the verge of losing jobs.

In many ways the policy makes a lot of sense, when the people closest to you are hurting, why wouldn’t you want to move to give them a hand up? In fact, it is a bit hard to believe that any government wouldn’t have that approach as a first line of purchasing, buying from domestic sources if at all possible or even  if it might cost the taxpayer a bit more in the long run. After all those firms don’t only pay taxes, they employ people who pay taxes.

I am inclined to think that the bigger problem the Americans might be taking on is determining what is ‘buying American’ in a global economy where American firms have moved production offshore to cheaper locales thus reducing their American workforce. Does ‘buying American’ mean from a company owned by Americans or does it mean actually manufactured in the USA? Does manufactured in the USA mean all the components are produced domestically or what percentage has to come from USA based sources?

An example comes to mind of a Canadian jean manufacturer who had the jeans produced offshore and shipped to Canada to have their labels sown on and being allowed to claim, “Made in Canada”. Corporate America, like many corporations around the world have created themselves a situation where protectionist legislation might not benefit them while it brings down a storm of hot headed response from other nations.

The corporate world in the western world, and in particular in North America, is beginning to reap what it has sown. How long did they think that they could continue to take jobs from Canadian and American workers, move them offshore and expect to have a continuous supply of consumers when the products returned to our shores?

Responding to potential ‘protectionism’ by screaming in outrage and threatening retaliation isn’t going to solve anything. We need to be paying close attention to the fact that the great depression was eventually brought to an end in part due to the second world war. We need to be extremely cautious that the solution to this world wide downturn is not find in isolationism, trade wars or anything else that could lead to a repeat.

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notice: The content of this post contains my opinions and my right to express them. I will respect your right to express your opinion in the comments as long as you’re not abusive and you respect my right to my opinion.

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